Total Canadian oil production is expected to increase to 5.6 million barrels per day by 2035.
That’s an increase of 1.4 million bbls/d compared to production in 2017 according to the 2018 Crude Oil Forecast, Markets and Transportation report released this week by the Canadian Association of Petroleum Producers (CAPP).
The forecast was released by CAPP during the Global Petroleum Show held in Calgary, June 12-14.
CAPP expects the growth to 2035 will be bolstered by a rise in oil sands production to 4.2 million bbls/d from 2.65 million bbls/d — despite a decrease in oil sands’ capital spending for the fourth consecutive year.
Western Canada accounts for about 95 per cent of the country’s total production, with conventional oil – including pentanes and condensates (natural gas liquids) representing more than one million bbls/d of the region’s total.
The report anticipates conventional production will remain largely flat through to 2035—rising to 1.33 million bbls/d from 1.32 million bbls/d in 2017.
The greatest potential for growth will be in the liquids-rich Montney and Duvernay formations (in Alberta), which are expected to contribute about 500,000 bbls/d of pentanes and condensates by 2026.
The forecast notes an increasing competitiveness gap continues to impede Canada when it comes to attracting energy investment.
CAPP says Canada’s inability to get major pipelines built, and create and implement efficient regulatory policies— along with the cancellation of a series of projects such as Northern Gateway, Pacific NorthWest LNG, Energy East – has eroded investor confidence in Canada’s energy sector.
Canadian oil producers continue to face pipeline constraints as federally-approved projects such as Kinder Morgan’s Trans Mountain expansion pipeline, Enbridge’s Line 3, and TransCanada’s Keystone XL have yet to begin construction.
In 2017, Canada’s oil supply—comprised of oil production and diluent—was 4.2 million bbls/d, exceeding existing available pipeline capacity.
CAPP forecasts oil supply will rise another two million bbls/d to 6.2 million bbls/d by 2035.
Meanwhile, the United States continues to aggressively streamline and reduce the costs associated with its regulations.
Capital spending in the U.S. rose 38 per cent to $120 billion in 2017 while investment in Canada fell to $45 billion.